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Wall Street ends flat as early gains evaporate

Wall Street ends flat as early gains evaporate
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First Published: Wed, Sep 21 2011. 08 47 AM IST
Updated: Wed, Sep 21 2011. 08 47 AM IST
New York: Stocks ended little changed on Tuesday as investors waited to see if the Federal Reserve would offer more economic stimulus and if Greece made progress in talks to avoid a default.
In the lowest volume session since late August, the market gave up earlier gains of about 1% as investors were wary of going home with long positions after an overnight downgrade of Italy’s credit rating.
Semiconductors were among the worst performers with the PHLX semiconductor index off 1.3%, dragging the Nasdaq down, after Xilinx cut its second-quarter outlook. Shares of the chipmaker fell 4.5% to $30.03.
Helping temper some European debt worries, Greece promised further cuts to its public sector before a second conference call with international lenders, whom Athens must persuade to extend more loans to avoid bankruptcy next month.
At the end of its two-day meeting on Wednesday, the Fed is expected to announce plans to intervene in the bond market to push long-term interest rates -- already near historic lows -- even lower in a move known as Operation Twist.
“They are focusing on the fact that a lot of people are expecting more out of the Fed than they are going to get -- they are going to get the twist, they are not going to get a QE3,” said Ken Polcari, managing director at ICAP Equities in New York.
“They are looking for certainty, not guesswork because it’s the uncertainty that causes the markets to become erratic. If the markets are clear on where they are going, then they start to trade back on fundamentals, but if it’s unclear, then it just trades on the headline news because it becomes erratic.”
Defensive sectors such as utilities, telecommunications and health care were the biggest advancers, indicating some investor nervousness.
The Dow Jones industrial average gained 7.65 points, or 0.07%, to 11,408.66 at the close. The Standard & Poor’s 500 Index fell 2.00 points, or 0.17%, to 1,202.09. The Nasdaq Composite Index lost 22.59 points, or 0.86%, to 2,590.24.
AT&T Inc rose 1% to $28.85, while Celgene Corp surged 7.1% to $65.56 ahead of a review by European regulators of the biopharmaceutical company’s multiple sclerosis drug Revlimid.
Earlier in the session, all three major US stock indexes were up 1%, with the Dow industrials climbing as high as 11,550.22, while the S&P 500 rose as high as 1,220.39. The Nasdaq had touched an intraday high at 2,643.37.
Apple Inc again hit an all-time intraday high, up almost 3% to reach $422.86, before closing up 0.4% at $413.45. Wedbush Securities added the stock to its “best ideas” list.
Among technology stocks, International Business Machines also gained 0.9% to $174.72 as the top performer on the Dow after offering concessions to settle an EU investigation into its business practices.
Oracle lost 2.3% to $28.35 during the session, but after the close, the stock rose 1.1% to $28.66 as the software maker posted quarterly results.
Data that showed US housing starts declined more than expected in August failed to catch much attention from the market.
Volume was light, with about 7.07 billion shares traded on the New York Stock Exchange, NYSE Amex and Nasdaq, below the daily average of 7.9 billion.
Declining stocks outnumbered advancing ones on the NYSE by 1,891 to 1,099, while on the Nasdaq, decliners beat advancers by 1,823 to 702.
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First Published: Wed, Sep 21 2011. 08 47 AM IST